Three Straight Records

The auto industry used to count it an achievement to put two record years back to back, but now, for the first time since 1965, it is rolling toward three straight annual records. Sales this year, including imports, will wind up at about 10,850,000 cars, some 600,000 ahead of last year's previous high. Yet at what by Detroit standards is, if anything, ripe old age the boom seems to be accelerating further, and the companies' main problem is producing enough cars to keep dealers well stocked. The same is true of trucks, which constitute a good gauge of the state of the economy. Manufacturers are selling all the trucks that they can produce; volume this year will be about 2,470,000, way up from last year's record 2,070,000.

For the first quarter of next year, the makers are scheduling an output of 2.6 million cars, 16% more than in the hot first quarter of 1972 and about equal to the alltime quarterly high set in the last three months of 1965. With that kind of start, automen are predicting yet another sales record of 11 million or more cars for all 1973, if--and it is a big if--the United Auto Workers do not stage a long strike against one of the Big Three when contracts expire next fall.

Luxury Compacts. The boom reflects a peculiar consumer psychology: car buyers seem to be going for economy and luxury at the same time. They are concentrating their purchases on compact cars, which now account for just over one-third of the market, easily outselling the next most popular class, the intermediates, which have just over one-fifth. Some of the fastest sales increases this year have been reported for American Motors' Gremlin (up 40%), the Chevy Nova (up 33%) and the Plymouth Valiant (up 19%). But then the buyers are loading these relatively low-priced cars with expensive options. Ford President Lee lacocca expresses amazement at the number of motorists who purchase Pintos at a base price of about $2,000 and proceed to equip them with stereo systems for $200 each.

Illogical as it may seem, this trend is helping U.S. automakers to compete against imports. Overall, sales of imported cars have held about even in numbers, but their share of the U.S. market has slipped to 14.8% this year from 15.4% in 1971. Imports that offer basic transportation and not much else are down: Volkswagen sales are off 14% this year, and Toyota volume has declined 6%. Foreign-made cars that also offer a touch of luxury are selling much better. The great success story among the imports is the Capri, which has a 53% sales gain and now accounts for one in every 20 imports sold in the U.S. Score another for Detroit: the Capri is made by Ford in West Germany.

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